Legal IQ Potpourri

Set – Off and Counter – Claim

Q. Distinction between Set-Off and Counter-Claim.

Uttarakhand Higher Judicial Service (A.D.J.) Exam. 2005
West Bengal Judicial Service Exam. 2000
U.P. Judicial Service Exam. 1997
Madhya Pradesh Judicial Service (Main) Exam. 1998.
Himachal Pradesh Judicial Service Exam. 2005
Haryana Judicial Service Exam. 2003

Ans. Important Distinctions between Set-Off and Counter-Claim—

(1) Set-off must be for an ascertained sum or it must arise out of the same transaction but a counter-claim need not arise out of the same transaction.

(2) Set-off is a ground of defence to the plaintiff’s action. In other words, it can be said that set-off is a ground of defence, that is to say a shield, which if established, would afford an answer to the plaintiff’s claim in toto (wholly) or pro tanto (in proportion) whereas counter-claim is a weapon of offence, that is to say, a sword which enables the defendant to enforce the claim against the plaintiff effectually as an independent action.

(3) In a case of legal set-off amount must be recoverable at the date of the suit, but in a case of counter-claim the amount must be recoverable at the date of the written statement.

(4) When the defendant demands in a plaintiff’s suit an amount below or up to the claim of suit, it is a case of set-off stricto sensu (in a strict sense) whereas when it is for a larger amount, the claim for excess amount is really a counter-claim—Munshi Ram v. Radha Kissan, AIR 1975 Punj 112 and Md. Farooq v. State Govt., AIR 1984 Ker 126 (FB).

(5) Set-off is a statutory defence to a plaintiff’s action, while a counter-claim is substantially a cross action.

Source : Kishor Prasad, Problems and Solutions in Cvil Law.

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